Does Best Brains have any restrictions on assigning the franchise contract?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| Assignment of contract by | Section 9.A | No restriction on our right to assign. | | j. | | | | franchisor | | | | "Transfer" by franchisee – | Section 9.B | Includes any type of transfer of the | | k. | | Franchise Agreement or assets or any | | defined | | ownership change. | | Franchisor approval of | Section 9.B | We have the right to approve all | | l. | | transfers but will not unreasonably | | transfer by franchisee | | withhold approval. | | Conditions for franchisor m. approval of transfer | Section 9.B | Transferee qualifies; all amounts due are paid in full; you are not in default; the transferee complies with training requirements; transferee has received required disclosure documents; then current form of Franchise Agreement signed; transferee assumes remaining obligations under your agreements; transfer fee paid; assets have been refurbished, remodeled or replaced; lessor consent to lease assignment, if necessary; Releases signed; guaranty of | | | Provision | Section in franchise or other agreement | Summary | |----|-------------------------------------------------------------------------------|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | performance may be required; and right of first refusal declined by us. (also see r below). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 32–34)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, franchisees face certain restrictions when transferring their franchise. Best Brains maintains the right to approve all transfers, but states that it will not unreasonably withhold approval.
To gain approval for a transfer, a Best Brains franchisee must meet several conditions. The potential transferee must meet Best Brains' qualification standards, pay all outstanding amounts owed to Best Brains, and not be in default of any agreements. The transferee must also fulfill the training requirements, receive the necessary disclosure documents, and sign the current version of the Franchise Agreement. Additionally, the transferee must assume all remaining obligations under the existing agreements, pay a transfer fee, and ensure the assets of the franchise are appropriately refurbished, remodeled, or replaced. If the franchise location's lease requires assignment, the lessor's consent must be obtained. Finally, all parties involved must sign releases, and a guaranty of performance may be required. Best Brains also retains the right of first refusal to acquire the franchisee's business, and this right must be declined before a transfer can proceed.
These stipulations are typical in franchising, as they allow Best Brains to maintain standards across its locations and protect the brand's reputation. The conditions ensure that any new franchisee is well-qualified and committed to the Best Brains system. The right of first refusal gives Best Brains the option to buy back a location if it sees strategic value in doing so. Franchisees looking to sell their Best Brains franchise should be aware of these requirements and factor them into their planning and negotiations with potential buyers.